Comment on the April 11 prediction: Prices rose to $3.99 on Friday the 13th, not Thursday the 12th, so I am going to grade this 3/4 CORRECT, 1/4 WRONG. Then, prices drifted lower for two weeks, until Thursday’s re-set to $3.89.

Saturday, April 28, 2012, 8:20AM: For educational purposes, let’s take a look at Thursday’s price hike. Completing my Gas Game spreadsheet Wednesday night, I had recorded a NYMEX price of $3.14 (averaging the current and next month’s futures price) and a Chicago wholesale price estimate of $3.00 per gallon. These days, I tend to use the Chicago estimate, and it corresponds to an estimated price to retailers of $3.70. Historically, retailers have gone to as low as 10 cents below current cost before initiating a price hike, and then they usually hike to 10 cents above cost (what I used to call the 20-cent margin price). So, the price hike was a bit of surprise to me, as I was recording prices in the $3.70’s in Grand Rapids, and the upper $3.60’s in Fort Wayne, and the hike was to $3.89 (kind of a 30-cent margin price). It is as if the Chicago wholesale price was $3.10, not $3.00. Further evidence that this was an unusual price hike includes the following: (1) as reported on this site in the comment sections, some non-Speedway retailers were rather slow to agree to the hike; (2) retail prices in Fort Wayne have already dropped at least 6 cents a gallon, and they are at $3.72 a gallon on Fuller Street in Grand Rapids; (3) my brother called from Fort Wayne and complained about Thursday’s hike, which he rarely does.

Looking to next week, wholesale prices jumped a bit on Friday, and retail prices are already all over the place. That feels like one of those situations where some time next week, there will be a price reset ($3.89 again?) that all the stations agree to almost immediately. I’m sure the secret e-mail will say, “No fooling around this time.” -Ed Aboufadel

In the northern suburbs of Cincinnati, OH, there are a lot of stations that never went up. I fact, some have even gone DOWN since Thursday.
The Kroger closest to my house has dropped a penny each day, from $3.60 Friday to $3.57 as of 6:45am today. Of course, all of the closest Speedways are $3.78-$3.79.

The Kalamazoo average is $3.826 with the lowest price $3.759 on Portage St./Rd., set by the Circle K BP.

The Grand Rapids average is $3.809. Excluding Sam’s Club in Kentwood ($3.679) and Costco in Cascade ($3.689), $3.699 is still the lowest price in Grand Rapids, available at 4 locations near the Circle K on 44th & Eastern plus the Quick Stop in Hudsonville.

The Michigan average ($3.814) is currently ABOVE the national average ($3.809).

The final (4:25) update in the Chicago spot is up 6.01¢ (1.96%) to $3.1196. Excluding the rack adjustment, that puts the Michigan spike line at $3.831816. Including last week’s huge -22.02¢ rack adjustment, the Michigan spike line would be $3.611616. I’m guessing $3.699 is closer to the real spike line.

Patrick reports today: “Tomorrow is the day that all gasoline terminals must only be supplying summer gasoline. Retailers have until June 1 to do so. Don’t expect an increase in price- we’ve already priced in the switchover.”

I don’t know what the Chicago spot was on May 1, but right now it is down 11.82¢ (3.89%) to $2.9225. That puts the Michigan spike line at $3.62289 (or $3.36549 if the increasingly irrelevant rack adjustment is included, -25.74¢ this week).

If there was any legitimacy for yesterday’s reset, it was a one day Chicago thing, as New York is currently down 2.57¢ and has closed down every day this week (settlements of -2.18¢, -2.75¢, and -2.14¢). New York WTI June crude oil is currently down $2.68 to $102.55. Every contract through March 2013 ($105.91) is higher than the preceding month. December 2020 oil is currently $85. If you think oil will be a lot higher than $85 in late 2020, here is an investment opportunity for you (though you will be one of those greedy speculators you are always complaining about).

Regarding yesterday’s reset, Patrick wrote: “I can’t justify it”

Retail prices in Kalamazoo are already down 10¢+ at 7 locations plus $3.789 at the Sunoco (formerly Frontier Gas) in Pavilion Township, reported at 11:11 a.m. today. It is possible that Sunoco never bothered to go up. The Kalamazoo average is $3.972.

In Grand Rapids, stations are as low as $3.679 at 2 locations (Admiral, Wesco) in Sparta. Excluding membership-only warehouses, 7 stations are reported today at $3.739–$3.779. The Grand Rapids average is $3.97.

Thanks to Admiral, Sturgis has the 6 lowest prices in Michigan, ranging from $3.489 to $3.589. The Michigan average is $3.921, 33.6¢ lower than the $4.257 it was one year ago. AAA lists tomorrow (May 4) as the all time average high price for Michigan, set in 2011: $4.259

Tomorrow is also the AAA all time price peak for every Michigan metropolitan area they cover, except Jackson ($4.286 on 5/5/2011) and Marquette ($4.307 on 5/13/2011), including: